tv Book TV After Words CSPAN January 8, 2011 10:00pm-11:00pm EST
especial interesting premise so much of economics relies on the concept of irrational accurate. people do things that make economic sense to them. the way the costs and benefits, compare and contrast. a decade ago most economists would say there's no mystery to why people pay what they pay it's just a rational people doing what rational people do. why is there any mystery to what we pay for things? >> guest: i would say in effect that premise has been proven wrong, that the idea of pure perfect rationality is incorrect and there's all sorts of other things going on, psychological quirks, ingrained biases we are not aware of the darkened like deciding how we
allocate our money and why we pay what we do. so for instance, the fear is a straight piece of research done by the university of new mexico who studied this and they found -- >> this is probably the first time left dancing has been mentioned on c-span, so i think some sort of a word or prize has to be given for this. >> guest: first time for everything first thing for lap dancers is the peak of the fertility were much higher but substantially tighter than at any other point in the cycle and this was going on without anybody knowing, the patrons didn't know this but certainly something was happening. either it was a small war with a lap dancer moved or something that was leading them to pay more leading to pay more for that last dance experience this wasn't some rational decision to pay more for the asset
>> host: this one into the realm of what is behavioral economics, freakonomics, this great appreciation for rational feelings or sentiment or psychology. are you locating this book and this sort of tradition? >> guest: i find the behavioral economics fascinating but the book is not quite all about these works. sometimes rational, sometimes we make extremely rational decisions we are going to do this rather than that. we are going to get married rather than stay single, go to school rather than not but sometimes not and sometimes there are all these others we are not contemplating that come into our decisions and for instance there are things to go back to this idea why we pay what we do for certain groups
that are not necessarily rational and i would point to the use of prices as a signal of value. this might be odd but it's still probably national in the sense that you think you're getting the best for your money say when you buy a bottle of wine. you think the $100 bottles of wine is better than the 50-dollar bottle of wine just because it costs 100 not 50, right? and there's another interesting experiment done by psychologists at mit which prove this point. it was -- >> host: predictably irrational. >> guest: that's right. he did this experiment he gave a bunch of students placebo pills. but to one set of the students he told them the bill was worth $2.50 a pop and the other students he told them they were worth 10 cents, and the students that the more expensive placebo got much more pay grade than the guys that got the cheap hill, so
it was playing a real function and these guys some braithwaite. >> host: i want to get into a lot of these but before we do, one of the of their premises and things to focus on is the way the different societies, a different geographic areas, the decisions people make about what to pay for things or the value they put on things vary greatly in again, economists may be 20 years ago would have told you things are universal. everybody, everywhere because they are irrational factors regardless of selectivity and the price around them to a similar degree. not that they would pay the exact amount but they would think about it in similar ways. but you have an interesting and sort of personal professional background that has given you sort of experience working with different cultures and viewing first hand the different types of prices and values people
place on things. can you talk little bit about that? >> guest: jul grew up in mexico city, was born in the united states but i left when i was six. my mother was mexican and i grew up in mexico until i left college and then since then as a journalist i traveled to japan and the united kingdom and about what makes the united states work. so have an experience how prices work to get >> host: to think back to the things the stand out to you compare it to. >> guest: i was a riding from the u.k., where i lived alone in a tiny apartment, a refrigerator about the size and i could only fit tiny little town little points of milk and my first experience going to the supermarket was you can only buy things in enormous quantities. if i wanted oranges i had to
body essentially almost a crate full, the same with potatoes and onions. milk came in very large containers, and the reason i figured out is i was arriving in brazil's shortly after inflation had been more or less pain, but after a year ran the tightrope inflation. hyperinflation and people went and bought and spend their wage the minute they got it because of the way that they would be worth half as much. so these enormous family shopping expeditions on payday where they basically by whatever. 100 oranges, 50 onions, 5 gallons of milk and spend it so that led these retailers and companies to package everything in the enormous sizes and it's funny because i had been back years later and you can see suddenly some of the sizes have come down because the price and
-- >> host: the premise you write i think it is useful to look when rioters are telling us what the book is about. you say the price we put on things, but we will treat for our lives says a lot about we are, and the central claim of your book is a free choice we make is shaped by the prices of the options laid out before us, what we expect to be the relative cost measured against the benefit which again seems somewhat obvious, but it works its way out in very different ways, and you lead by talking about garbage from and we have this free is that one man's waist is another man's gold and we know there is money to be made in recycling and so countercurrent in the way we treat garbage, but talk a little bit about the way you use this kind of a differential attitude towards garbage and waste in different cultures and what that means. >> guest: one thing i mentioned in the price of everything is the idea how our
attitudes towards waste as a society will be a function of our stage of development, so i point to the fact china might be a very dirty place today but it's because both the price they pay for this added pollution for the acid rain and the environmental consequences of this very fast cold growth they are engaged is i daresay to develop less important, less relevant than providing jobs to millions and millions of farmers that are being displaced. so right now their calculations in society the pollution is worth it. now as they move up the environmental and economic ladder this choice will change because we are suddenly adding an extra job and will not be as perfect for getting this extra chunk of pollution and they would become a little bit more like us.
boustany you also talked about in the u.s. we pay people to take your garbage away and buried somewhere and another country v.p. singh more and putting a high price on it causes people may be to recycle more and that in some other places people will spend their days going through garbage in order so it's a resource because they feel they can line eight. >> guest: this hypothetical girl in india making a living in a garbage dump and she i think realizes she is also treating away her health. living in a garbage truck, but it is what she has she has her body and so it makes sense, she's making a living. >> host: see you can look at this from a development perspective and say this makes all the sense in the world. we have a lot of money. we don't like the implicit
message that there is obviously material that can be restricted from recycling and somebody else that has the utility for somebody else and in the world of trade we should be doing that and of course larry summers, the former president of harvard, former white house economic advisor got himself in a little bit of trouble by pointing this out. what was this about? >> guest: this was in the early 1990's. we were about to engage in the first world summit in rio de janeiro, and mr. summers basically said that he signed his name to a memo. i'm not sure he actually wrote it physically to a chief economist of this memo suggested made sense for the rich companies to export their garbage and countries exporting something that increases your odds of getting profit by some tiny amount isn't going to matter all that much when you were under mortality rate is
like one in 100 or tannin 100. and this caused an enormous uproar not because it was wrong but it sounded -- is on the battered. and i would also and if we could discount corruption, this would be perhaps a better argument. but in some countries, some poor countries, this attitude, this easy attitude toward garbage doesn't really have to do with the social choice. it's not like the people of poor countries are deciding democratically that they want to make this trade it's the regime that represented and so if you trust in the space process of that regime then fine. >> host: and you highlight something you and i -- >> guest: i may physicist.
>> host: and i studied history and political science and we both ended up writing about economics and talking to a lot of economists the have pretty strange war views sometimes as the memo and his way of thinking it makes perfect sense to think that we -- that way and he would think this is a strange way. and i think this is something that economists get themselves into trouble but we have seen that our systems when we have economists who believe in this too much run things this also leads to issues because it isn't simply about putting a price on something and what markets work. there are so many other considerations that matter. do you think this continues to be a blind spot for many people in the economics profession? >> guest: this blind spot is
tops. and i think it's been -- i mean, i would say there are two big planas botts and the ones that jump out at me most are the notion that price is always allocate resources and are always right and we can second-guess them and to my mind what happened in the housing market is all we need to prove is this is incorrect, and yet there is this notion of utility and kenneth very narrow quantity that embodies our wealth in some ways and this doesn't count all sorts of things that are important for us like social connections and social norms that i think would work within the economic framework of the world. i don't think it is and it just isn't. >> host: this notion that we are all these missiles after the
cheapest prices. if that were the case everybody would chabad wal-mart and only at wal-mart and they would only by a sickly with the need to get through the day and we would seek the cheapest possible food and nutrition if there were a pill the same nutrition as a salad bar or something else we would go to that and obviously we don't. i found myself in very sort of thinking with your passage, coffee because i have a very similar and complicated relationship to the devil's brew that you seem to. tell us a little about your complex feelings toward consumption and how this gets into the mix of what you're writing about. against it is a huge labor to substance perhaps it is to you. to stop smoking way back then and so on a drink a lot and the
particular example i mentioned in everything is that i had to have this great coffee. it's about this great cup of coffee that i had from this little shop at the corner of my house in brooklyn run by the new zealand who sold apply as well, very offbeat and mice, wonderful cappuccino for $2.75 and i thought this was a steal and one of the best deals on had and so i would happily go there every day and suddenly one day they were suppressed to $3.50 and i was shocked. 25% increase this is a multiple of the inflation rate. how dare you. you're starting to look like some corporate cheeps in here, and the thing, the problem approach had to do with how i was screaming at the place.
i was seeing the the new price in terms of the gold price and it seemed like a ripoff and then let me to not drink their coffee anymore. i felt this is totally unacceptable, but then thinking about it a little further i started to figure out actually the new price wasn't more expensive than the prices at any other coffee shop in the city. it's starbucks or other coffeeshops within my general commute to work so in the senate in a different frame. the coffee was still better than anywhere else and it wasn't more expensive so i went back and started drinking their coffee again. >> host: if you make it at home -- of course i was a dunkin' donuts for years and i developed a habit for espresso and if you make that at home obviously it's much cheaper to buy the package, and it's also a quicker and it is a very
efficient caffeine delivery vehicle. i'm surprised smart economists don't drink expresso in the explicitly espresso. >> guest: the thing to get through the day. >> host: but you're not simply thinking about what is the cheapest, fastest way for me to do it? because there is more to it. sometimes you want to sit somewhere and read a paper or you go to starbucks because they have wi-fi and you like sort of standing at the espresso bar and feeling like you're about people or you want to get away from your office, and these are all things that we tell you and you sort of put a price on that by saying i'm going to pay $2.50 for a dollar for this machine or $3.50 and everybody else has their own sort of utility if not this universal thing you can define. it's what it means to every individual person. >> guest: at that particular moment in time. >> host: now one of the constructs here is about the price of everything.
if it assumes that a blocker who likes to use the words market and everything which we certainly seem to have a lot of the time what are some of the areas in which putting a price on things, cleaning markets and things helps solve societal problems did you talk about? >> guest: i would say the most immediately relevant would be energy especially carbon emissions this is a cost that we impose on the environment that nobody pays for, so we are basically depleting the environment of the lack of as it were. and pricing, putting a price on this would go a long way in us
reducing our emissions of the substance because it would basically make it more expensive for us to burn fuel. >> host: we have seen this on the other emissions, not carbon dioxide with the government has done this with some other things and it seems to have worked. >> guest: indeed. >> host: at a relatively low cost. by placing a price on something invisible all of a sudden it becomes quite invisible. now, of course you can take this into interesting new directions and you can to get too far, a market for transplant, different countries are experimenting were dealing with it in different ways and you talk about that. what are some of the different approaches out there? >> i would say most of the world it is illegal to come and the
country i know where it is legal is iran. the reason people are thinking about this and some countries they are thinking about making it legal and even in the united states talking about loosening the conditions with which the way you could pay for it to the is there aren't enough kidneys to go around for all the people who need them and kidneys are a strange oregon politically. in the 1970's for some reason i am not entirely sure why, congress decided that every american who suffers kidney failure is entitled to dialysis. so if dialysis keeps you alive for a year for $26,000 plus, so congress decided that if you have a kidney malfunction your years of life are worth as much and they would pay no matter
your age was an interesting thing i found and just if you had kidney malfunction, paying for cervical cancer screenings would provide as much life or less money or giving antiretroviral drugs would actually be more cost-efficient as well and they didn't get the public largess it was just kidney so that is a strange quality kidneys have another problem if you had a kidney ailment is there are very few kidneys up for transplant and the last and looked statistics about ten people by a day in the united states waiting for a kidney for transplant. and then a group of economists actually it was gary becker at the state university in new york who kind of crunched some numbers and they figured that
taking about 15 tons in dollars per kid me, offering to pay $15,000 per kidney would increase the supply of kidneys for donation. >> host: in america? >> guest: in the united states. the way they reach the number is the use estimates of the value of life better used by the federal government and in different ways and also, you know, how much it would cost x numbers of days rather than going to work and so they kind of add it up your costs and they figure that for that kind of place people would be willing to donate a kidney and the would increase the supply of kidneys and reduce the death rate services to the important issues against each other to the desirable outcomes or one out, and one uncomfortable situation if we could pay for kidneys you would have less people dying
from kidney failure. but donating a kidney is, selling kidneys is unacceptable. it is a taboo i can't tell that lie entirely understand. >> host: it probably poses a health risks -- >> guest: assuming we you're measuring these risks, but leedy would be incorporated which is what he does. they would be incorporated. host when it comes to blood or sperm or eggs which is produced and reproduced are comfortable with -- >> guest: not eggs though. you can solve them for research purposes but not reproductive purposes. i think those are guidelines if they are not law was our medical guidelines because in fact the eggs are sold but i would put -- there's another interesting comparison which is in my view serving in the military forces,
so you can take money to go and risk your entire life so that is an acceptable to treat. you are taking to increase your chance of death and the increased chance is ponnuru at war been by donating things. so this is unacceptable. >> host: you brought up something interesting which gets to your book which is putting a price on, dalia of life and we would think this is very distasteful. how do you put a price on anybody is life on 80 we are told that life is priceless? but of course we do this all the time, and in fact we ourselves are continually putting a price. we decide how much life insurance we want to buy how much we think we need, and that is essentially putting a price on your life, but the government also does this when they consider regulations, is it worth imposing a cost of
$5 billion to save x number of lives and of course we see the 9/11 fund probably the most wrenching example where somebody was tasked with looking at these 3,000 people who are killed in this event, how much they need and how many more years they had to live and instead of just singing each is worth a million the came up with essentially three goals and different answers. how does that type of thinking exist? >> guest: it fits perfectly in the notion that everything has a price. this is perfect. and though the way we calculate these prices i don't think we'll ever went to find a way to value life that will -- the we will be generally comfortable with.
>> host: but with 9/11 it was a sort of function of how will lead work and therefore how many years you have to work but also what you had done to life up to that point and versus those making 30, $40 a year you'd be viewed differently. >> guest: the principles to much gdp, how much future gdp has a non-existent. in an odd shell that is what this. you were not [inaudible] your tables will tell me the you've got another 40 years to live. i would add that up and the rest of your life is worth whatever $40 million. there was -- >> host: it's possible that a banker would have been fired the next year and go to work in a mcdonald's and the person
cleaning may become a part of -- may have been writing a screenplay and become the next j.k. rowling. >> guest: the more striking and in a sample of this is people who were not employed were considered not to have any economic value because they were not making any money and so the only got was considered the monegan on infil you and this was an arbitrary number, to under $50,000 which was pulled out of the air, and just to be sure, there wasn't a mechanical kind of algorithm that was used to price these lives. you had to work within even though the congress passed it as an unlimited fund but they were trying to keep the overall amount relatively low and then mr. feinberg was sensitive to the issue of inequality. he didn't want to replicate the inequity of life after death and
so he tried to push back but was a lot of negotiation with people about fighting he was worth 40 million i don't have 40 million, so -- >> host: do you think this was a more just outcome than just saying if he were there you would get x amount? >> guest: my preference in terms of the justice is exactly that. this is an enormous cost but part of the purpose of this is to stop losses against the airlines and so they knew that if they did this they would get sued if it wouldn't serve its purpose to avoid lawsuits so there would be tons of lawsuits out there and that is why i think they were forced to do it this way, but the highest payment if i recall correctly was more than $6 million, and you had some investment bankers that probably made that in a
year and not everybody took the field. there were some high-income who sued and the goblet higher payment on average but at the end of the day i think they were worse off because the high your payment of course. chris we are going to get rid for a minute and then we will pick up the conversation. >> "after words" with eduardo border and daniel gross will continue after this short break. "after words" with eduardo porter and daniel gross continues. >> host: placing a monetary
value of finton judging the success or failure based on that in one book you write about not every country in the world is and there are some people who are looking for alternate ways of looking at economic success that don't just involved. what are some of those and do they have any utility? >> guest: let's put it in terms of measures of well-being or welfare which at the end of the day is what we should strive for and there are other things besides money that produce that welfare and one very clear and sally and one is that it is very kind, so there are countries that have made different payoffs in the united states. the united states is a country where working hours of increase over time. vacation time has a decreased, we work more than most other
industrialized countries and this wasn't always so. japan 20 years ago worked more than the japanese-americans and now they work less. and this had led to actually accompanied by higher economic growth. the united states is just the country in the world today. but some of these other countries when you ask how they feel their life can be an equal or better shape than the united states but they report fairly high levels of satisfaction in their life and one of the reasons is to have enormous amount of time to engage in all sorts of school things like having long lunches. >> host: and the it been working with trauner team to gin up the alternative measure which to me strikes me as you are losing the race you want to change the rules. >> guest: i think that is a little bit of what is going on.
>> host: the french are still pretty darn rich. it's not like they are making an excuse. but what is the himalaya country? >> guest: the king whose name is difficult to pronounced and i can't remember came up with the notion they should measure growth national happiness and the act we spent years devising the the happiness index which they would use as we used gdp to be sure and economics accept the would use their gnh to determine the success of their policies. >> host: have you been to china? >> guest: i have. >> host: what struck me is the sort of sheer focus on economic data and economic growth to the exclusion -- you go to any provincial town, sit down with a local official and the first thing they talk about is aware gdp was up 6% last year, and of
course very poor countries they feel they need to have this growth for the sake of development but also the sake of their political system. but do the society's -- is there some tipping point where the society we come far enough and we can start judging our progress by things other than the amount of output we are creating every year. >> guest: let me start by saying i think that gdp is a really good indicator. [laughter] of progress. i mean, and the fact that it's like easy to measure come easy to compare around the world, it is fairly objective and of the things that go into it are fairly uncontroversial we're as the index for the happiness in bhutan has things that are perhaps not great for all of us, so one of the things that was in this index is whether you engage
in the game that consists of cracking your school against somebody else so if you did this more you're supposed to be happier. so i would question that assessment and also the point here is this involves constructing such an alternative index of wellbeing requiring a level of the arbitrary decision making. you need to be king, like this may be happiness -- >> host: the level of how much any any experience in the world where there are 500 different games they are supposed to do and golf makes them happy for some people thought declare we will decide the country's love and happiness based on how many rounds of golf a play. >> guest: that's right. in bhutan specifically, they're has been a decline in the practice of these traditional sports the doherty and happiness but i wouldn't say that that makes people unhappy. it's because their preferences or -- they've got to the wii army be soccer, i don't know. but the evolution of preference
is changing these things in a way that these other kind of like ad hoc measures wouldn't capture very well. so just to say i think gdp is not a bad measure. it's just it doesn't encompass everything. >> host: one of the more fascinating sections of the book has to do with women and i think an interesting set of observations really this is today to be writing about the global economy you have to be as large an anthropologist as anything else because it's really you encounter that the rest of the different social systems and experiences that play themselves felt in the way that these economies are constructed and the way things are priced. we talk a little about polygamy and the impact on economics and what that says about the price of women in those societies and also a little bit about india, china, korea. >> guest: perhaps the birth of
the basic starting points here is that the family, the marriage is an economic transaction. we tend to think of it as just going by the law that no, in fact there are trade-offs and -- >> host: we've known this in new york city for a long time because it's like your lease is coming up, where you were going to move next. this canal and the family is a little economic humor where the husband and the wife and the pay and they're very specific characteristics. to this factory meant to produce kids which is the ultimate goal of couples, and so this little factory where the women put aids in child care and the men put sperm and substance from the
outside the office would fields or whatever, they're have been many institutional arrangements throughout history that have contributed that have allowed this little factory to function, and one of them is polygamy. >> host: so polygamous societies which there are a number of round, women are comparatively scarce resource and more highly valued. >> guest: that's right. i find the counter intuitive notion people might think that women are worse off in the polygamous society but it's not necessarily so. i find this great quote who said who wouldn't rather be robert kennedy's first wife than the third. >> host: who would rather be robert kennedy's third wife. >> guest: and so that's why women have more of a shot of getting a high-quality meal in a polygamous society and that is their objective given that they are going to invest a lot of energy and time just carrying.
>> host: it also works the of the ring given misleading, the prestige, the measure you have that powerful there are the sort of competing. >> guest: the work perfectly, powerful men were perfectly calls their objective not just in terms of prestige but also to maximize their jeans under the next generation and if they had liked a handful of white ticket have a bunch of kids and this is different from the genetic perspective. the thing is it doesn't work for all of the minute works for the powerful men and that is why i think this proves on stable. i mean i think there are two reasons. one is that in a polygamous societies it is common for the men to pay for women because you know, they are a scarce resource
and more common than monogamous society stand polygamous societies, and so this kind of goes into mortgages that could be used for productive the end of the parts of the economy and also lead to more childbearing, polygamous societies with more kids and so these things are -- seem to have worked against the other thing i might me delete could be the more interesting reason it didn't work for them on a wealthy man, you have the wealthy, the rich, the kings, whatever and having enormous numbers that you have the poor with no chance to reproduce and this creates a very unfavorable society. >> host: i think one of the more destructive when you look at the treatment and the evaluation of women and the two biggest countries in the world, india and china, it's a completely different story and it seems a world in which
economics, kunkel have fled to pretty bad outcomes although what has happened in india and china. >> guest: i think there are celebrities and important differences as well. i think that the root cause is the women have very little value -- >> host: even as the economies are growing at this rate and industrializing and getting all the technology and becoming sources of innovation? >> guest: what i would say is in the future this will probably lead to for instance in china you see a great movement of women into the workforce. a lot of the women of working, a lot of the work is actually the women, is about ultimately increase the value in society and within their families, and so these things might change. but as it says today in these countries, the women have very
little value and this comes from a long tradition and because it's essentially the our traditional societies and the women didn't work outside the house told -- >> host: they're also a cost to the parents because these are tough to pay -- >> guest: that's right. >> host: -- the family of the husband to take them out of their house. >> guest: you have to get them married, right? and you have to get them myriad so you have to invest in that, pay for that, and in india some of these payments can amount to several years worth of an income so this isn't just junk change. >> host: when you have in both of those countries is an equal number of boys and girls born, growing up to maturity and there is a pretty significant match the descent. >> guest: and the most all of
consequences of this dynamic [inaudible] or a baby girl after birth. if i remember correctly, chinese academy of science estimated that by 2020 there will be something like 25 million men of married age without a bride because of the difference in fertility, and at that point -- >> guest: at that point women won't be extremely valuable. in fact at the end of the refer to this piece in "the wall street journal" a couple of years ago about women going from town to town demanding a bribe price and then, you know, leaving kind of like waiting at
the altar so this becomes a little business opportunity but this points to -- >> host: the movie runaway bride. >> guest: that's right, absent economic incentive from that movie. >> host: one of the more interesting and paradoxical issues is the fact one of the more powerful prices these days is no price at all. free. chris anderson did this book free about how the future of business is giving away your product for free it is giving consumers uptake and you can sail the cassell of the things to read a good case studies particularly the entertainment and music in which people are discovering essentially devaluing your own product the work you do and giving it away somehow becomes a viable economic strategy and as a
writer accustomed to getting paid for articles and books someone said it's a way to sell a lot of books is give them away i would tell my publisher the are more insane than usual. how does this work? >> guest: the argument in the price of free is that this is wrong. i disagree with it in your comments away with the contest and i think we have substantial proof through history and the argument that giving your content away is a marketing that will allow you to create a reward in some other domain giving away your cd will allow you to make more money in concert. >> host: why should let you know we are not getting paid for this. >> guest: that's true. [laughter] this very little empirical evidence to support that claim and you mentioned some of them
in the specific examples and one that i really thought was kind of like pretty much to the point is this idea that retial head and 9-inch nails -- >> host: music groups. >> guest: yeah, to sell their music which is to give it away for free actually putting it on mine and allowing their fans to pay whatever they wanted. this is what retial hid did, pay whatever you want, and 9-inch nails give away part of its music for free and it allows you to pay less for the lower quality download but anyway, and basically allowed people to get their music without paying for it and they made a lot of money by than selling a high-end version within the t-shirt and vinyl album or a little book and the middle of money and the elbe missile sold part but these are
very famous acts that have an enormous following. there are people who would give an arm for retial head. but then this was tried by salles williams who is quite good, like his music. he is a friend of mine inch nails who produced a bit of his album for him and tried to market and sell it in the same sort of way which is the put it on line and there was a high quality version that cost $5 low quality that was available for free and almost nobody was willing to pay, like 25,000 people were willing which gave him $25,000 an ounce on which isn't enough to start making music. >> host: this superstore affect where we live in this world that the rules just seem to be different for people who are already famous, well-known. they can plug into these types of technologies and networks and
get something out of it that mere mortals can't. on twitter one of the kardashians gets paid to tweet because she is so many followers she says i like this product she will charge whereas if i said hey, i have my 3600 printer for the worse and i want to tell them what a great coffee maker i have, that's very nice but we are not going to pay you for that but this highlights something that explains why as you touch on in the book that the greatest soccer player in the world in the 50's and 60's made 150 tawes dollars a year and his present dollars, and david beckham who is quite good but it isn't transcendent anymore makes a gigantic multiple of that.
why does the society or markers put a different price, superstars today than they did 20, 30, 40 years ago? >> guest: to go to the example it is because david beckham seems by hundreds of millions of people who could like him and followed him and follow his play and where he wears a logo of a certain sports brand where is the ever seen by a very small group of people so for all of his greatness, you know, you know you say nobody will pay for your 30s 600 -- 3600 followers. he lived in a very small universe. television wasn't a popular. there was only like a few hundred thousand tvs in brazil at the time. a commercial satellite wasn't yet available so he couldn't sell stuff to the world as david
beckham. either football games that would have everybody watch or products and you could see this not only in football or across sports or entertainment and just to go back to the retial hid versus saul williams comparison, there is work done by an economist alan krueger of princeton who found a share of concert taken by the top artists was growing immensely select 20 years ago the share of the top 10% of artists was like 30% of all concert revenue. by the mid 2000 fisher was like 57%. so, this is a clear migration of my spending on entertainment to the very top facts and the reason i do this because i can. i know that act comes to me where the volume in the world.
hearst could you talk about the price not so much about fi that you pay to be long to a religious group but about some of the economic implications and this is something i don't think it's controversial because [inaudible] the capitalist work ethic this is something every social studies has been taught to believe about protestants led to more capitalism compared to the catholic church brought to the u.s. and these sorts of the values and systems lead to more economic, have led to greater economic growth and there's a connection between capitalism. of course now capitalism has become bottled and uncorked. countries like brazil and like
india, countries with no official religion like china seem to be increasing that, but what do we -- what do we know about how the price that's sort of extract some or adds to economic growth. >> guest: my basic argument again here is that choosing to belong to a fate has some of the qualities of an economic transaction so again, we believe -- we think we believe in a superior god because we believe in it because he exists, that in fact many of the reasons we join a religious because the benefits we derive from joining me here on earth, not the afterlife and we are willing to pay certain price and this price can be measured in money and hiding wouldn't be part of the price of
training and also going to church, and behavior, not doing certain things, not eating certain things, and so it is a little bit like a country club membership or, you know, being part of a biker gang. if you're paying in terms of sacrifice because the payment that you make, mostly and sacrifices things the you are not allowed to do but in order to belong to this group why this is so is it because these sacrifices ensure only the most devoted can belong to the group because only they will be willing to make the sacrifices and the more devoted the membership, the high year the benefits for all the members so for instance one of the benefits and easier one to understand the difference religion and insurance here are lots of mutual health going on within parishes and there is one study of what happened after the tsunami hit indonesia, there was a very sharp rise in the form of
collective prayer so people started joining in beijing groups at a higher rate, and one of the reasons was these groups are kind of like self-help, mutual help organizations so people could get some kind of economic assistance. so there would be a pretty clear benefit you would get from religion but there are other tangible in surveys religious people often report better health, more happiness, and in fact some have suggested longer life spans and this comes from a sense of belonging, social cohesion and so forth. pos could you talk about pricing faith which is something we cannot see or touch on something else we can't see or touch is the future and are you right we are putting a price on the future in different ways beyond sort of bullying and annuity or
saving for retirement. what you mean by that? >> guest: what i mean is we are engaging in activities that will cost us down the road in 50 years, 100 years and by this i mean he essentially the consumption of fossil fuels, the emission of carbon into the atmosphere and that would impose a cost on our environment and the economy's 50, 100 years on the road, and we are imposing a cost on the future and right now we are faced with this question how much are you willing to pay today to avoid the future cost? what is the price you say to the future and this is an extremely difficult question to answer and that is perhaps why there is so little movement in this the area of an agreement. >> host: one of the things i find personally interesting is
the price of media and the different prices people are willing or not willing to pay for the same media and every time we publish something that offers a sort of case study. now the readers could pay $2 to get "the new york times" to read one of your editorials. they could be paying more than that so that they get it to deliver every morning. they could be reading it for free online, they could be going to a library and reading a paper online. when we see different people it may be a habit but we who are producers are also consumers and i am as serious about your consumption and payments for the media. is that something you think about when you are spending a
lot of time all day or watching tv are you aware? i'm paying for this cable or this is something i go out of my pay to pay for? >> guest: to think about my own experience to pay for what of media i do not consume in the form of cable television, which i view very little of. i pay for some of the media i do consume, i pay for "the new york times" and "the new york times" pays for the subscriptions i get in the office but i also consume a lot of media that comes to me for free because i have my computer turned on all day and i am on the internet for hours and hours a day and there i am receiving the voluble information to me or really nothing come and so i realize -- >> host: if you are not paying for your product in other words it is being sold is you're all --
>> guest: entirely true, watching broadcast television, you are paying per hour, you're paying 18 minutes in time and that's why broadcast tv had such a problem with speed or cable tv had a problem with tivo because you could erase the abs and the business falls apart but yes, you are paying the time. >> host: again i think it is a -- as we go through our lives there are certain magazines i gladly pay for what i don't read that. i don't sit around and think i wasted that $20 so much of what you see online for free you just take for granted it's for free and risk to the country ask you to read it for 50 cents to would be like no it's not worth it to me. how much is this bookselling for? >> guest: it changes every day. you go on amazon one day and will give you one price and to the one amazon another and will get another place we think they
have some algorithm that, you know, that changes in terms of the demand they perceive out there. >> guest: >> host: and will be available as and e-book which will be a different price for that. it could be an audio book and sold as an iphone application. >> guest: which would make three heppe. >> host: it could be sold in english or in the u.k. or australia, and each would have a different price and people could go to the library and check out which has its own cost to it. >> guest: you have to go there in two weeks to get it back. >> host: >> guest: one object prices and inherent in the object is in the transaction. it's a measure of the preferences of the people that are buying it and so the costs put the floor on what you can make a profit by selling this particular thing that the price